With less than a week to go to the crucial ballot by 8,000 Glanbia Co-operative Society shareholders on the purchase of the Plc’s €1 billion business, its 14 farmer directors have urged all and sundry to vote yes to the “landmark” deal.
The co-op board includes three Waterford farmers: company chairman Liam Herlihy from Knockanore; John Fitzgerald, Kilmeaden, and Nicholas Dunphy, Kilmacthomas.
In a letter sent to shareholders this week they and their board colleagues say they’re convinced the transfer of all milk processing and agribusiness operations to 100% farmer ownership is in the best long-term interests of all shareholders and their families, and more compatible with suppliers’ needs than a plc structure.
“A co-op structure is much better placed to support expansion opportunities in a quota-free environment and to deal with the impact of price fluctuations,” the board’s letter states. “In contrast, a plc must focus on total shareholder value and will invest in whatever geography or market that offers the greatest growth potential.”
The proposal is subject to the approval of 75% of shareholders attending and voting at two special general meetings in Kildalton College, Co Kilkenny – the first of which takes place next Monday (May 10).
The acquisition is being funded primarily through a reduction in the Society’s shareholding in the plc from 54.6% to 20%. This, the board says, will secure farmer ownership of a well-managed, world-scale business with strong cash earnings and dynamic growth opportunities.
“Crucially, the chief executives and management teams of all three business units will transfer over to the co-op, ensuring continuity of expertise and innovation,” the letter confirms.
The board members also stressed the benefits to all shareholders from the spin-out of 10% of the Society’s plc stake – valued at €90m at current share prices. A typical co-op member with 4,000 co-op shares would receive plc shares worth around €7,500. These shares can then be held as an investment or sold for cash.
See The Munster Express newspaper for full story.